The National Company Law Tribunal (NCLT) on Friday has approved the merger of HDFC (Housing Development Finance Corporation) and HDFC Bank. HDFC Ltd has already received approvals from Reserve Bank of India, Securities and Exchange Board of India (Sebi), PFRDA and Competition Commission of India (CCI) as well as from India’s stock exchanges – BSE and NSE. NCLT has also given approval for holding a shareholders’ meeting for obtaining approval for the proposed merger.
Right now, HDFC Bank is the subsidiary of HDFC (Housing Development Finance Corporation). HDFC was founded in 1977 and is headquartered at Mumbai. The other subsidiaries of HDFC are:
- HDFC Bank
- HDFC ERGO
- HDFC Life
- HDFC Mutual Fund
- HDFC Credila
HDFC Bank was founded in August 1994 and is headquartered at Mumbai. HDFC Bank has more than 68 million customers with 6,342 branches,
The HDFC-HDFC Bank merger is expected to be completed by the second or third quarter of FY24. Last year, in April, HDFC Bank announced that parent HDFC will merge with the bank to enable seamless delivery of home loans and leverage on the large base of over 68 million customers of HDFC Bank and inter alia improve the pace of credit growth in the economy.
The proposed merger is to create a large balance sheet and net worth that would allow a greater flow of credit into the economy. It will also enable the underwriting of larger ticket loans, including infrastructure loans, an urgent need of the country.
Under the scheme, HDFC shareholders will receive 42 shares of HDFC Bank having a face value of Re 1 each for 25 shares of HDFC having a face value of ₹2 each. Further, HDFC shareholding in HDFC Bank will be extinguished as per the scheme of amalgamation. Post the merger, HDFC Bank will be 100% owned by public shareholders and existing shareholders of HDFC will own 41% of the former.
HDFC Bank, with more than 68 million customers, 6,342 branches, and a full suite of credit, liability, and distribution offerings is the leading private sector bank with deep relationships, insights, and understanding of its customers built over multiple decades.
HDFC is India’s premier housing finance company and has unrivaled relationships, scale, and deep underwriting expertise in the housing sector, built over multiple decades and across economic cycles.